Fund managers often adopt either an active or a passive management approach to investment strategies Briefly describe and discuss major distinction between the two approaches (4 marks) Portfolio risk reflects the overall risk for a portfolio of investments It is the combined risk of each individual investment within a portfolio These risks need to be managed to ensure a portfolio meets its objectives Explain whether combining domestic shares with some international shares can help reduce portfolio risk Explain how this possible riskreduction is achieved (4 marks)

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Question: Fund managers often adopt either an active or a passive management approach to investment strategies. Briefly describe and discuss major distinction between the two approaches.

Fund managers often adopt either an active or a passive management approach to investment strategies. Briefly describe and discuss major distinction between the two approaches. (4 marks)
Portfolio risk reflects the overall risk for a portfolio of investments. It is the combined risk of each individual investment within a portfolio. These risks need to be managed to ensure a portfolio meets its objectives.

Explain whether combining domestic shares with some international shares can help reduce portfolio risk. Explain how this possible riskreduction is achieved.(4 marks)

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